USD/INR was little changed on Wednesday, as hedging demand and foreign portfolio outflows weighed on the rupee. Better risk mood came from lower oil prices after reports the IEA may release record reserves. Traders also watched for possible RBI action to limit rupee weakness. Indian equities were weaker, with concerns about AI effects on the IT sector, though the Middle East war remained the main focus.

Rates And Market Positioning

India’s one-year and two-year OIS rates have risen more than 45 basis points each since the conflict began on 28 February. The 10-year bond yield rose 11 basis points through Monday before giving back part of the move, and swaps price in nearly two RBI hikes over 12 months. WTI traded near $82.30 a barrel in Asian hours. The IEA plan would be larger than the 182 million barrels released in 2022, while risks around the Strait of Hormuz could limit oil declines. The US Dollar may firm on safe-haven demand amid conflict updates, alongside upcoming US CPI and Friday’s PCE data. USD/INR traded near 92.30, with resistance at 92.81, support at 92.06 and then 91.30; the 14-day RSI stayed in the mid-60s. We recall how this time in 2025, geopolitical tensions sent USD/INR surging towards its all-time high of 92.81 on fears of a wider conflict. Today, with the pair trading in a tighter range around 84.50, the market’s memory of that volatility is key. Last year’s foreign portfolio outflows, which reached over $4 billion in March 2025, have since reversed, with net inflows of $22 billion recorded for the year ending February 2026. The threatened supply disruption through the Strait of Hormuz in 2025 was a major driver, but the IEA’s record reserve release ultimately capped the rally in oil prices. This provided crucial support for the Rupee, preventing a more severe depreciation. With Brent crude now hovering around a more stable $86 per barrel, implied volatility on INR options is significantly lower than the highs seen during the first quarter of 2025.

Lessons From Last Year

Looking back to 2025, swap markets were pricing in nearly two full rate hikes from the Reserve Bank of India. However, as inflation cooled faster than expected through late 2025, the RBI held rates steady, a stance it has maintained into this year. This divergence between market pricing and central bank action from last year should make us cautious about pricing in aggressive policy moves now. The safe-haven demand for the US Dollar during the 2025 conflict was a powerful, but temporary, force. Now, the focus has shifted back to interest rate differentials, with recent US non-farm payrolls data showing a robust 215,000 jobs added last month, keeping the Federal Reserve on a hawkish footing. This suggests that long-dollar positions via call options on USD/INR could be attractive, even without the geopolitical panic of last year. While the ascending channel from 2025 was broken later that year, the memory of the 92.81 peak serves as a psychological barrier. Currently, the pair is showing signs of range-bound activity, with implied volatility on one-month options falling to just 4.2%, well below the double-digit peaks of last year. Given this lower volatility, selling strangles with strikes set at 83.75 and 85.25 could be a viable strategy to collect premium in the coming weeks. Create your live VT Markets account and start trading now.

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On 2 March, the Swiss National Bank said it was “increasingly prepared to intervene” in FX markets, referring to the conflict in the Middle East. It pointed to the risk of rapid currency gains and safe-haven inflows that could threaten price stability. The franc has close trade ties with the eurozone, which can lead to fast price pass-through. Higher eurozone inflation can lift the euro’s real effective exchange rate (REER) versus the franc, as inflation gaps have stayed wide for the past few years.

Nominal Strength And Reer Dynamics

The franc has moved towards new nominal highs, while its REER has shown little change over the past two years. This may allow the SNB to accept some nominal franc strength. At its meeting next week, the SNB may focus on tactical steps to damp volatility rather than signal a wider policy change. Options mentioned include reducing liabilities by buying back bills or not rolling repurchase agreements. Market action could occur if the nominal move is severe, such as several big figures in a single session. Any intervention would be aimed at smoothing volatility in response to events. We recall that around this time last year, in March 2025, the Swiss National Bank signalled it was prepared to intervene in currency markets. This followed concerns over safe-haven flows into the Swiss Franc due to geopolitical tensions. The bank’s main goal was to manage any rapid appreciation that could disrupt price stability.

Implications For Traders And Volatility

The SNB’s tolerance for a strong franc was, and still is, supported by dynamics in the real effective exchange rate (REER). With February 2026 Eurozone inflation figures holding around 2.4% while Swiss CPI remains near 1.3%, the inflation differential continues to widen. This gives the SNB room to accept nominal franc strength without the currency becoming overvalued in real terms. Looking back, the bank’s actions in 2025 were tactical, focused on smoothing extreme volatility rather than dictating a specific exchange rate level. We saw this during a few sessions in the second quarter of 2025 where EUR/CHF saw sharp intraday moves, which were quickly dampened. This pattern reinforces the view that the SNB is not defending a line in the sand but is acting as a volatility brake. For traders in the coming weeks, this suggests that sharp, disorderly moves in the franc will likely be met with intervention. The SNB’s implicit backing makes selling short-dated volatility an attractive strategy. This is especially true as 1-month implied volatility on EUR/CHF is now trading at a relatively subdued 4.8%, down from the peaks of over 7% seen during the instability in early 2025. Therefore, derivative positions that benefit from range-bound price action or a slow, grinding appreciation of the franc are favorable. Selling out-of-the-money calls on EUR/CHF or USD/CHF could allow traders to collect premium, capitalizing on the SNB’s desire to prevent explosive volatility. The primary risk remains a sudden, large-scale event that could overwhelm the central bank’s tactical approach. Create your live VT Markets account and start trading now.

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GBP/USD fell for a third day and hit a weekly low near 1.3370 in the Asian session on Thursday. It later recovered a few pips to about 1.3400 and was down less than 0.15% on the day. The US Dollar rose as traders moved towards safer assets amid ongoing fighting in the Middle East. This demand for the Dollar added pressure to GBP/USD.

Dollar Demand Rises On Geopolitical Risk

Iran’s Islamic Revolutionary Guard Corps said it launched a joint operation with Lebanon’s Hezbollah against targets in Israel, Jordan, and Saudi Arabia. The report followed the most intense US-Israeli bombardments on Iran on Tuesday and pointed to a further escalation in the conflict between Israel-US forces and Iran. Looking back at the Middle East hostilities in 2025, we recall how the sharp flight to safety benefited the US Dollar. That event established a clear pattern of dollar strength during major geopolitical flare-ups, pressuring pairs like GBP/USD. This memory should guide our strategies, as markets now price in a higher risk premium for regional instability. In the coming weeks, we should anticipate that underlying volatility will remain elevated. This makes hedging with options a sensible approach, particularly buying put options on GBP/USD to protect against a sudden downturn. Data shows that during the 2025 crisis, one-month implied volatility for the pair jumped by over 30%, and while it has settled, it remains above the five-year average. The policy divergence between central banks will also be a key driver. With the US Federal Reserve signaling a more hawkish stance to curb persistent inflation, which sits at 3.1% as of last month’s data, the dollar has a fundamental tailwind. In contrast, the Bank of England is grappling with a weaker UK growth forecast of just 0.5%, making it less likely to match the Fed’s tightening cycle.

Energy Markets And Portfolio Hedging

We must also consider the impact on energy markets, given the regions involved in last year’s conflict. Brent crude futures, which spiked to over $110 a barrel during the 2025 escalation, are sensitive to any new developments. Holding long positions in crude oil call options could therefore act as an effective portfolio hedge against a repeat of those events. Create your live VT Markets account and start trading now.

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Standard Chartered strategist Nicholas Chia now expects the Reserve Bank of Australia to raise the cash rate to 4.10% at its 17 March meeting, after previously forecasting no change. The bank still expects another rise in Q2, lifting its terminal rate forecast to 4.35% from 4.10%, likely at the May meeting. The change follows firm activity indicators and RBA communication that leaned towards tighter policy before the blackout period. The note also points to higher inflation expectations, with limited tolerance for any move away from stable short-term expectations.

Oil Price Shock And Inflation Expectations

Part of the rise in expectations is linked to an oil price shock. The RBA may look through that factor, but it may still respond to broader shifts in expectations. The bank sees a high chance of a split board decision in March. It also says the 17 March call is close, with the main risk being the RBA holding rates to await more data such as quarterly core inflation. The article was created using an AI tool and reviewed by an editor. We are seeing a familiar pattern emerge as we approach the next Reserve Bank of Australia meeting. Looking back to this time in 2025, we saw a sudden pivot in expectations towards a rate hike due to firm economic activity and a worrying rise in inflation expectations. This created significant short-term volatility in the rates market.

Positioning Ahead Of The Rba Decision

The situation today, March 12, 2026, has echoes of last year, which warrants close attention. The latest monthly CPI indicator for February surprised slightly to the upside at 3.6%, and retail sales figures also beat forecasts, showing continued resilience in consumer spending. These are the same types of indicators that caused the market to reprice RBA expectations so quickly in 2025. This shift is reflected in interest rate futures, which now imply a roughly 30% chance of a rate hike at next week’s meeting, up from just 15% a week ago. Given this rising uncertainty, traders should consider using short-dated options to hedge against a hawkish surprise from the RBA. Relying solely on a continued pause in the cash rate now carries significantly more risk. However, we must also remember the outcome from March 2025, where the RBA ultimately chose to hold rates steady, despite the hawkish chatter, before hiking later in the second quarter. This historical precedent suggests the RBA board may again prefer to wait for more comprehensive quarterly data before acting. Therefore, strategies that profit from increased volatility, rather than a purely directional bet on a hike, may be the most prudent approach. Create your live VT Markets account and start trading now.

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Oil and Brent prices kept rising after reports that three commercial vessels were struck by projectiles near the Strait of Hormuz. Markets focused on the risk of disruption around the waterway. IEA members agreed to release a record 400 million barrels of emergency reserves. This was more than double the 182 million barrels released after the Russian invasion of Ukraine in 2022.

Market Seen Release As Temporary

The release did not stop gains, as the action was treated as short-term support rather than a longer-term fix for supply risks linked to the Strait of Hormuz. Concern remained about further supply shocks. President Trump said the IEA release would ease energy price pressures while the US continues its campaign against Iran. Oil market worries continued despite this statement. Reports said President Trump may invoke the Cold War-era Defense Production Act to support oil production off Southern California. US Interior Secretary Doug Burgum said the law is “absolutely” under deliberation to help a Houston-based company drill and to bypass state-level permit issues. The economic outlook was described as moving towards stagflation, with firm economic data offset by supply-side pressures. The article was produced using an AI tool and checked by an editor.

Looking Back From Early 2026

Looking back to 2025, the market correctly viewed the massive IEA emergency oil release as a temporary fix rather than a real solution. As of today, March 12, 2026, government data confirms over 80% of those 400 million barrels have already been absorbed by the market. This leaves the global supply system with a thinner cushion than it had a year ago. The geopolitical risk premium remains high, as tensions in the Strait of Hormuz have not abated since the vessel strikes last year. Just last month, February 2026 trade data showed a 12% increase in shipping insurance premiums for tankers passing through the strait, reflecting the market’s ongoing fear of a sudden supply disruption. We believe any further escalation will cause a sharp price spike that is not fully priced in. The US policy response that was deliberated in 2025 is proving to be a slow-moving solution. While the Defense Production Act was invoked to fast-track drilling, industry timelines show new significant production from these California projects is still over a year away. This domestic supply increase is a story for 2027, offering no relief for the tight market we face today. The stagflationary environment we worried about has become a reality, with the latest reports showing US GDP growth for the last quarter at a weak 0.7% while inflation remains sticky at 4.2%. Historically, this combination makes the market extremely sensitive to commodity price shocks. Therefore, we expect any upward move in oil to be magnified by these broader economic fears. Given this backdrop, we see opportunities in long-dated call options on Brent crude, which is currently trading near $97 per barrel. Current implied volatility is not fully capturing the risk of a sudden escalation in the Middle East. Buying calls provides a defined-risk method to gain upside exposure to the supply-side shocks we continue to anticipate in the coming weeks. Create your live VT Markets account and start trading now.

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EUR/JPY fell to about 183.55 in early European trading on Thursday, as safe-haven demand supported the Japanese Yen. NBC News reported Iran launched its “most intense operation since the beginning of the war”, firing advanced ballistic missiles towards Tel Aviv and Haifa, while Oman evacuated all vessels from Mina Al Fahal. Ongoing Middle East tensions have increased demand for safe-haven assets, which can pressure the cross. On the euro side, ECB policymaker Isabel Schnabel said new quarterly forecasts will partly include the economic impact of the war in Iran.

Geopolitical Risk Drives Yen Demand

ECB Governing Council member Peter Kazimir said a rate hike may be nearer than previously thought, and the bank could act if the war lifts inflation expectations. Markets have raised expectations for ECB rate rises after these comments, with swaps implying faster tightening than earlier. LSEG data shows the ECB is now seen hiking as soon as June. On the chart, EUR/JPY remains above the rising 100-day EMA near 181.40, with the RSI at 51. Support is seen around 183.10, then 182.10 and 181.40. Resistance is near 184.90, then around 185.70. The intense new conflict in the Gulf is driving money into the safe-haven Japanese Yen, pushing the EUR/JPY pair down. We are seeing a classic geopolitical reaction as traders seek safety from the missile attacks on Israel. This creates a direct headwind for the cross, despite other factors at play.

Options Strategies For Rising Volatility

We remember from the initial weeks of major conflicts, like the one that began in 2022, the CBOE Volatility Index (VIX) surged above 35, indicating extreme market fear. Current volatility gauges are also rising, with the VIX climbing 12% in the last 24 hours to 19.5, suggesting traders should prepare for wider price swings. This environment is ripe for option strategies that profit from increased volatility, such as straddles. At the same time, the European Central Bank is signaling rate hikes to combat inflation, which could strengthen the Euro. Recent data shows Eurozone inflation unexpectedly rose to 2.8% last month, giving weight to policymakers’ hawkish comments. Markets are now pricing in a 75% chance of a 25-basis-point hike by the June meeting, creating a powerful upward force on the Euro. For derivative traders, this means volatility is the main opportunity. Buying options can be more attractive than trading the spot price directly due to the uncertain direction. A long strangle, buying a put option with a strike near the 182.10 support and a call option with a strike near the 185.70 resistance, could profit if the pair breaks out of its current range. Alternatively, those holding long positions should consider hedging their downside risk. Buying put options with a strike price below the key 181.40 support level offers a form of insurance against a significant escalation in the conflict. This level is critical because a sustained break below it would invalidate the current bullish structure we have been tracking. Create your live VT Markets account and start trading now.

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USD/CHF rose to about 0.7820 in early European trading on Thursday. The US Dollar gained against the Swiss Franc as higher oil prices raised inflation concerns and may lead to tighter US monetary policy. The Middle East war increased fears of rising US inflation. The Federal Reserve is expected to keep rates unchanged at its 17–18 March meeting, with many economists projecting the next cut in June or July 2026.

Oil Prices Drive Inflation Fears

Oman evacuated all vessels from its Mina Al Fahal oil export terminal as a precaution, Bloomberg reported on Thursday. Iran began what it described as its most intense operation since the war began and stepped up efforts to disrupt the Strait of Hormuz. Further tension could increase demand for safe-haven currencies such as the Swiss Franc. US data due on Friday include the January Personal Consumption Expenditures Price Index and the second estimate of fourth-quarter GDP. We are seeing the US Dollar gain against the Swiss Franc as rising oil prices fuel inflation worries. Brent crude futures have recently climbed above $110 a barrel, a level not seen in over a year, increasing pressure on the Federal Reserve to delay any rate cuts. This environment favors a stronger dollar in the short term. The escalating conflict in the Middle East, with Iran’s actions in the Strait of Hormuz, is the main driver of this uncertainty. While this currently supports the USD via higher oil prices, we must remember that the Swiss Franc is also a traditional safe-haven currency. We saw a similar dynamic in late 2025 where both currencies strengthened during initial shocks.

Key Risk Events Ahead

Traders should be cautious ahead of Friday’s US PCE inflation data. The last core PCE reading for December 2025 came in at a stubborn 3.1%, well above the Fed’s target. A surprisingly low number this week could quickly reverse the dollar’s recent gains and challenge the current uptrend. Given this conflicting tug-of-war, purchasing volatility through options strategies appears prudent. Implied volatility on USD/CHF one-month options has already jumped to a six-month high of 9.5%. Strategies like straddles or strangles could benefit from a significant price move in either direction, whether from a hot inflation report or a major geopolitical escalation. Next week’s Federal Reserve meeting on March 17-18 is widely expected to result in a rate hold, but the accompanying statement will be critical. The market has already adjusted, with futures now pricing in less than a 40% chance of a rate cut by June, down from 70% a month ago. Any hawkish language from the central bank could add further fuel to the dollar’s rally. Create your live VT Markets account and start trading now.

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Gold prices in Saudi Arabia fell on Thursday, based on data compiled by FXStreet. Gold was priced at SAR 620.68 per gram, down from SAR 624.55 on Wednesday. The price per tola slipped to SAR 7,239.49 from SAR 7,284.62 a day earlier. FXStreet also listed SAR 6,206.80 for 10 grams and SAR 19,305.25 per troy ounce.

How FXStreet Derives Local Prices

FXStreet calculates local prices by converting international rates using the USD/SAR exchange rate and local units. Prices are updated daily at the time of publication and are for reference, with local rates able to vary slightly. Central banks are the largest holders of gold. They added 1,136 tonnes worth around $70 billion in 2022, the highest annual purchase on record, according to the World Gold Council. Gold often moves inversely to the US Dollar and US Treasuries. It can also move opposite to risk assets, and may rise when interest rates fall and weaken when borrowing costs rise. The slight dip in gold prices we are seeing today is minor when viewed against the larger economic picture. We are currently facing uncertainty over the Federal Reserve’s next move, especially after their statements in January and February of this year reinforced a cautious, data-dependent stance on rate cuts. This hesitation has kept the US Dollar relatively firm, creating short-term headwinds for gold priced in dollars.

Central Bank Demand And Market Strategy

However, a strong floor of support remains firmly in place due to massive central bank buying. Looking back at 2025, we saw central banks add over 800 tonnes to their reserves in just the first three quarters, marking a record pace for that period. This trend of de-dollarization and reserve diversification by emerging market banks provides a significant buffer against price drops. Gold’s role as a hedge against inflation is still very relevant, even as the rate of inflation has cooled from its peaks. The US Consumer Price Index, which lingered near 2.9% in late 2025, remains stubbornly above the central bank’s target, encouraging some investors to hold gold. Ongoing geopolitical tensions also continue to fuel demand for the metal as a safe-haven asset during turbulent times. We should also consider the inverse relationship between gold and risk assets like stocks. After a strong rally in the S&P 500 for most of 2025, the market has shown signs of fatigue in the first quarter of this year. Any significant pullback in equities could trigger a rotation of capital into the perceived safety of gold. For those trading derivatives, this creates a complex but opportunity-rich environment. The conflicting signals from central bank policy and physical demand suggest that options strategies could be effective for managing risk. Traders might consider using call options to position for a potential breakout if the Fed signals a more definitive pivot to easing, or utilizing spreads to trade the expected volatility in the coming weeks. Create your live VT Markets account and start trading now.

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Gold prices in the Philippines fell on Thursday, based on FXStreet data. Gold was priced at PHP 9,862.49 per gram, down from PHP 9,931.73 on Wednesday. Gold also dropped to PHP 115,034.20 per tola from PHP 115,841.80 a day earlier. Other listed prices were PHP 98,625.13 for 10 grams and PHP 306,757.80 per troy ounce.

How FXStreet Calculates Local Gold Prices

FXStreet derives Philippine gold prices by converting international rates into PHP using the USD/PHP exchange rate and local units. Prices are updated daily at the time of publication and are for reference, as local rates may vary slightly. Central banks are the largest holders of gold and increased reserves by 1,136 tonnes worth about $70 billion in 2022, according to the World Gold Council. This was the highest annual total since records began. Gold often moves opposite to the US Dollar and US Treasuries, and it can also move opposite to shares. Prices can react to geopolitical tension, recession fears, interest rates, and changes in the US Dollar because gold is priced in dollars (XAU/USD). The minor price drop in Philippine pesos is largely a currency effect and shouldn’t be the main focus. We are paying more attention to the inverse relationship between gold and the US dollar, especially as the dollar has softened following the Federal Reserve’s recent pause on interest rate cuts. This pause comes after a series of rate reductions we saw throughout the second half of 2025.

Options Strategies For Near Term Exposure

We view persistent buying from central banks as a strong support level for gold prices, a trend that continued robustly through 2024 and 2025 after the record-breaking purchases observed back in 2022. With recent data showing US inflation remaining sticky around 3.1%, the metal’s appeal as a hedge against inflation is growing. This environment makes holding long positions in gold futures a compelling strategy. For the coming weeks, we see buying call options on gold as a prudent way to gain upside exposure. This allows traders to benefit from any sudden price rally driven by geopolitical news while limiting the maximum loss to the premium paid. This strategy positions us well for a potential re-test of the all-time highs gold briefly touched back in 2024. However, for those with existing long positions, hedging against a potential downturn is wise. Purchasing out-of-the-money put options can provide a cost-effective insurance policy against an unexpected strengthening of the dollar or a more hawkish tone from the Fed. This protects profits from sudden market reversals. Implied volatility has been ticking higher, which makes options more expensive. Therefore, we should also consider using bull call spreads to lower the cost of entry. This involves buying a call option at a specific strike price while simultaneously selling another call with a higher strike price for the same expiration. Create your live VT Markets account and start trading now.

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AUD/USD fell in Asia on Thursday, ending a four-day rise after reaching about 0.7185, its highest level since June 2022. It traded near 0.7130, down 0.30%, and earlier slid to 0.7125. The US Dollar firmed as tensions involving Israel, US forces, and Iran reduced demand for risk assets. Higher Crude Oil prices raised inflation concerns, lowered expectations of near-term US Federal Reserve rate cuts, and pushed US Treasury yields higher.

Rba Outlook Shifts

In Australia, comments from RBA Deputy Governor Andrew Hauser led markets to bring forward expectations for a second rate rise as early as next week. This supported the Australian Dollar and limited further AUD/USD losses. On the 4-hour chart, the pair held below the 200-period EMA and later moved above the 0.7130 level. RSI is near 55, and MACD remains slightly positive, though momentum has eased. Support is around 0.7120, then 0.7080 and 0.7040, near prior lows and the 200-period EMA. A break below 0.7040 would point to 0.7000, while resistance is at 0.7150, then 0.7175 and 0.7220. We recall that period in early 2025 when the pair was pulling back from a multi-year top near 0.7185, with many seeing the dip as a buying opportunity. That bullish sentiment was supported by a hawkish Reserve Bank of Australia which seemed ready to hike rates further. As of today, March 12, 2026, with the AUD/USD trading around 0.6650, the market dynamic has clearly shifted.

Drivers Behind The New Regime

The aggressive RBA stance we noted back then has reversed, as Australian inflation has cooled to 3.2%, prompting the central bank to cut the cash rate to 3.10%. While the US Federal Reserve has also started its own easing cycle, the interest rate differential still provides underlying support for the US dollar. This fundamental change is a primary reason the pair failed to hold onto gains above the 0.7000 level throughout last year. The risk aversion that was pushing the US dollar higher has eased, but headwinds for the Aussie dollar have emerged from other areas. We have seen key commodity prices soften, with iron ore, a crucial Australian export, falling from over $130 a tonne in late 2024 to around $110 a tonne currently. This puts direct pressure on the Australian dollar’s valuation. For derivative traders, this environment suggests that selling call options with strike prices well above current levels, perhaps around the old support of 0.7000, could be a viable strategy. The odds of a sharp rally back to those early 2025 highs seem low given the current central bank policies. Alternatively, traders expecting continued softness could consider buying put options with a strike below the 0.6600 support level. The technical picture has soured significantly since we saw resilience above the 0.7100 mark. The previous support level around 0.7080 now represents a major long-term resistance area. Our focus in the coming weeks will be on whether the pair can defend the 0.6600 handle, as a sustained break below it could open the door to testing the lows from last year. Create your live VT Markets account and start trading now.

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